Boeing To Consolidate Most Of Its Services Work Into New Operating Segment

Boeing [BA] on Monday said it plans to stand up a new operating segment in 2017 that will consolidate the core capabilities that currently reside in its commercial and defense services portfolios.

The new Boeing Global Services segment will be led by Boeing executive Stanley Deal, 52, who is currently senior vice president of the company’s Commercial Aviation Services business. Prior to that role Deal was vice president and general manager of Supply Chain Management and Operations for Boeing Commercial Airplanes.

Boeing Chairman, President and CEO Dennis Muilenburg. Photo: Boeing

Boeing Global Services will bring together core capabilities that are within Commercial Aviation Services and the Boeing Defense, Space & Security segment’s Global Services & Support Group. Boeing said some defense and commercial customer fleet support will remain within the two existing business units, adding that the new segment will have a broad portfolio of advanced services and bring together the capabilities of various subsidiaries, including Aviall and Jeppesen.

Boeing said that creation of the new services segment is aimed at further penetrating the services market and meeting customer demands.

“Stan is an exceptionally capable and experience leader, and he’s ideally prepared to stand up an integrated Boeing services business to expand our share of a global commercial and defense services market worth an estimated $2.5 trillion over the next 10 years,” Dennis Muilenburg, chairman, president and CEO of Boeing, said in a statement. “Substantial services growth is core to Boeing’s strategy as we enter our second century, and this move is a key enabler to accelerate our efforts and provide increasing value to our customers.”

The new unit will stand up during the third quarter of 2017. Boeing Global Services will be headquartered in Dallas, where Aviall has a large presence. Boeing said that for the foreseeable future most of the work to be done by the new business will remain at existing locations.

Commercial Aviation Services has more than 12,000 employees worldwide and Global Services & Support more than 13,000 employees. Global Services & Support is the Defense Department’s largest performance-based logistics contractor, Boeing said.

Boeing also announced that Kevin McAllister is the new president and CEO of Boeing Commercial Airplanes effective immediately. McAllister joins Boeing from General Electric’s [GE] GE Aviation business. Most recently he was president and CEO of GE Aviation Services.

McAllister succeeds Ray Conner, who remains vice chairman of Boeing until his planned retirement at the end of 2017.